TEXAS PANHANDLE POTENTIAL ACQUISITIONSinformdecisions.net/pdf/PanHanTargMkt.pdf · Financial Institution State Type Deposits Deposits Count Institution MERGER CANDIDATES Stratford

TEXAS PANHANDLE POTENTIAL ACQUISITIONS

June 30, 2006

Deposit Balances by County and Financial Institution

April 26, 2007 TO: Chief Financial Officer

Financial Group, Inc.

FROM: Rich Place Informed Decisions, LLC This memo was prepared as if Informed Decisions, LLC had been engaged to identify merger candidates - potential acquisitions - in the Texas Panhandle for a $300 million financial institution. A comprehensive list of all financial institutions in the geographical area specified by the client was developed using deposit balances reported by county. Those institutions that are not viable merger candidates are identified and listed separately. The remaining list can be further refined and prioritized based on the client’s knowledge of the markets and financial institutions. This process is undertaken to identify and prioritize those financial institutions that the client could contact regarding a potential merger. The intention is to establish and maintain a relationship with merger candidates, not necessarily to initiate an immediate transaction. For a community bank, the decision to sell is often driven by the personal considerations and preferences of the shareholders. By maintaining contact, management becomes familiar with the bank’s operations and situations that may motivate the shareholders to sell, which improves the probability of completing a successful transaction. An example: the outside Chairman of a $100 million community bank drove over to the next county seat to talk to the owner of a $20 million bank about selling. The seller wasn’t ready, yet. Talks continued for nearly three years. When the time was right, the Chairman got the first call and had a slight edge over a competing bidder. This acquisition profitably expanded the acquirer’s market and facilitated further expansion. Super-regional holding companies have staffs dedicated to this process. A community bank can establish a calling program at minimal cost. Such a program enhances long-term planning, which may include de novo branching; generates useful information for evaluating transactions; and provides other benefits even if an acquisition is never completed.

Potential branch purchases can be identified through the market analysis. Institutions with limited deposits, low market share and insufficient growth prospects may decide to divest its branches. Knowledge of these situations may warrant contacting the potential seller. Again, the goal is not to initiate an immediate transaction; rather, management can be prepared to react quickly when the decision to divest is made. Be prepared: the analysis and calling program also provides information on potential buyers and their probable targets. With this information, management is prepared if approached by an acquirer; if shareholders raise questions regarding expansion or a possible sale; or when the time is right. DEPOSIT DATA: All financial institutions (commercial banks, savings banks, and thrifts) with branches in the specified geographic area are identified by county. This analysis uses June 30th deposit data reported by the FDIC. County deposits provide control balances to assure that all financial institutions have been identified and considered. However, such balances may include brokered CDs that overstate the deposits relative to the actual market. EXHIBIT ONE - TARGET GEOGRAPHIC AREA: This is the top six tiers of counties in the Texas Panhandle. It encompasses the thirty-four counties in EXHIBIT ONE. Page one lists the counties alphabetically with the principle city; a map is also included. Page two presents the counties in descending order by deposits. EXHIBIT TWO – MERGER CANDIDATES: Fifty-eight financial institutions were reported as having branches and deposits in the 34 counties. Thirty-one are presented in the top section of EXHIBIT TWO for further consideration. The 22 listed in the middle section are excluded because a large portion of their deposits are outside the specified area, with the cutoff set around 60%. Financial institutions that are too large to be acquired are presented at the bottom of the exhibit. The data is preserved for the client’s review in the event there is something beyond the numbers that may warrant further consideration. The size limit is based on the client’s total assets and available equity; its capacity, and inclination, for raising additional capital; and an acceptable ratio of tangible common equity to tangible assets. The client has total tangible assets of $300 million and tangible common equity of $36 million with no trust preferred financing. Management would prefer to maintain the tangible common equity ratio at 8.0% but might be willing to accept 7.0% for an exceptional acquisition. Raising additional capital, including trust preferred financing, is possible but the client’s intent is to utilize excess equity. Price multiples of 1.75 and 2.00 are applied to the target equity ratios to estimate the goodwill created in the transaction and the total assets supportable by the

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resulting tangible equity; the underlying calculations are presented in the SUPPLEMENTAL EXHIBIT following the numbered exhibits. Based on these parameters and calculations, the total tangible assets that the client can acquire would be between $75 million and $125 million. Historically, deposits have approximated 90% of total assets so the maximum deposit balances to be considered would approximate $110 million. Through this process, 31 potential merger candidates were identified from the 34 counties based on reported deposits and the client’s parameters. One financial institution has deposits in excess of $110 million but is included for consideration because the consolidated balance sheet can be downsized to accommodate such an acquisition. The initial listing is prioritized based on size; generally, one or two larger acquisitions would be preferable to multiple smaller acquisitions. Other screens could be applied to a larger area, such as a state with diverse markets, but are not required for this example. The next step is for the client to review this list and the two lists of excluded institutions given its knowledge of the banks and their ownership, management and markets. Such non-financial factors and client preferences are used to prioritize the calling program. In some cases, obtaining financial data readily available from regulatory reports may be warranted. EXHIIBTS THREE and FOUR provide the detailed deposit data used to develop the list in EXHIBIT TWO. EXHIBIT THREE – FINANCIAL INSTITUTIONS: This presents the deposit balances and market share for each financial institution that was developed by county in EXHIBIT FOUR. It allows management to evaluate a specific merger candidate based on branch locations and market share. EXHIBIT FOUR – DEPOSITS BY COUNTY: This exhibit was developed to identify each financial institution’s deposits by county and calculate market share. These results are carried forward to EXHIBIT THREE and restated by financial institution. EXHBIT FIVE – HOLDING COMPANIES WITH BANK SUBSIDIARIES: The holding company, as opposed to the bank, is generally the entity to be acquired. However, management may be more familiar with the bank name. This exhibit cross-references the holding company to its bank subsidiaries.

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EXHIBIT ONETEXAS PANHANDLEALPHABETIC COUNTY LISTWITH PRINCIPLE CITY AND DEPOSITSJUNE 30, 2006 (millions)

Principle June 30, 2006County City Deposits

1 Armstrong Claude $20.52 Bailey Muleshoe 88.8 3 Briscoe Silverton, Quitaque 47.1 4 Carson Panhandle 77.3 5 Castro Dimmitt 82.6 6 Childress Childress 117.5 7 Collingsworth Wellington 63.9 8 Cottle Paducah 49.6 9 Dallam Dalhart 168.4

10 Deaf Smith Hereford 197.9 11 Donley Clarendon 80.6 12 Floyd Floydada 106.0 13 Foard Crowell 20.8 14 Gray Pampa 326.5 15 Hale Plainview 402.7 16 Hall Memphis 64.4 17 Hansford Spearman 174.8 18 Hardeman Quanah 58.9 19 Hartley Hartley, Channing 16.4 20 Hemphill Canadian 118.8 21 Hutchinson Borger 166.1 22 Lamb Littlefield 246.0 23 Lipscomb Booker 76.9 24 Moore Dumas 161.0 25 Motley Matador 11.1 26 Ochiltree Perryton 267.4 27 Oldham Vega 11.0 28 Parmer Friona 164.4 29 Potter Amarillo 2,547.3 30 Randall Amarillo 945.2 31 Roberts Miami 10.8 32 Sherman Stratford 69.1 33 Swisher Tulia 118.2 34 Wheeler Shamrock 135.2

TOTAL $7,213.2

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EXHIBIT ONETEXAS PANHANDLESUMMARY OF COUNTIESBY TOTAL DEPOSITSJUNE 30, 2006 (millions)

June 30, 2006County Deposits

1 Potter $2,547.32 Randall 945.2 3 Hale 402.7 4 Gray 326.5 5 Ochiltree 267.4 6 Lamb 246.0 7 Deaf Smith 197.9 8 Hansford 174.8 9 Dallam 168.4

10 Hutchinson 166.1 11 Parmer 164.4 12 Moore 161.0 13 Wheeler 135.2 14 Hemphill 118.8 15 Swisher 118.2 16 Childress 117.5 17 Floyd 106.0 18 Bailey 88.8 19 Castro 82.6 20 Donley 80.6 21 Carson 77.3 22 Lipscomb 76.9 23 Sherman 69.1 24 Hall 64.4 25 Collingsworth 63.9 26 Hardeman 58.9 27 Cottle 49.6 28 Briscoe 47.1 29 Foard 20.8 30 Armstrong 20.5 31 Hartley 16.4 32 Motley 11.1 33 Oldham 11.0 34 Roberts 10.8

TOTAL $7,213.2

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EXHIBIT TWOTEXAS PANHANDLECONTACT PRIORITIESJUNE 30, 2006 Total

Hqtr Institution In-market Branch % ofFinancial Institution State Type Deposits Deposits Count Institution

MERGER CANDIDATES1 Stratford Bancshares, Inc. TX Bank $122.4 $122.4 3 100.0%2 WSB Bancshares, Inc. TX Bank 100.5 100.5 5 100.0%3 ISB Holdings, Inc. TX SB 84.7 84.7 2 100.0%4 Spearman Bancshares TX Bank 83.1 83.1 2 100.0%5 Perryton Bancshares TX Bank 70.8 70.8 1 100.0%6 Childress Bancshares, Inc. TX Bank 68.6 68.6 2 100.0%7 Security State Bank TX Bank 67.9 67.9 1 100.0%8 First Canadian Bancorp TX Bank 66.6 66.6 2 100.0%9 DG Partnership, Ltd TX Bank 66.4 66.4 3 100.0%

10 Dalhart FS&LA TX Thrift 66.3 66.3 2 100.0%11 High Plains Bancshares TX Bank 66.0 66.0 2 100.0%12 Floyd County Bancshares TX Bank 64.9 64.9 1 100.0%13 First State Bankshares TX Bank 64.5 64.5 1 100.0%14 XIT Bancshares, Inc. TX Bank 60.2 56.3 3 93.4%15 First Paducah Bancshs, TX TX Bank 43.2 43.2 1 100.0%16 First State of Mobeetie TX Bank 43.1 43.1 2 100.0%17 First Dalhart Bancshares TX Bank 43.0 43.0 1 100.0%18 Falcon Bancorporation TX Bank 40.4 40.4 2 100.0%19 First FS&LA Littlefield TX TX Thrift 35.7 35.7 2 100.0%20 Quitaque National Corp. TX Bank 32.3 32.3 1 100.0%21 Northern Bancshares, Inc. TX Bank 31.4 31.4 2 100.0%22 Groom Bancshares TX Bank 29.7 29.7 2 100.0%23 Quannah Financial Corp. TX Bank 27.6 27.6 1 100.0%24 GSB Bancshares TX Bank 27.3 27.3 1 100.0%25 Kress National Bancshares TX Bank 24.4 24.4 1 100.0%26 Miami Bancshares, Inc. TX Bank 24.4 24.4 2 100.0%27 Donley County Bancshs TX Bank 24.2 24.2 1 100.0%28 First State Bank TX Bank 20.8 20.8 1 100.0%29 Crowell Bancshares, Inc. TX Bank 20.8 20.8 1 100.0%30 First Amherst Bancshares TX Bank 12.0 12.0 1 100.0%31 GrayCo Bancshares TX Bank 10.3 10.3 1 100.0%

TOTAL DEPOSITS $1,539.4 53

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EXHIBIT TWOTEXAS PANHANDLECONTACT PRIORITIESJUNE 30, 2006 Total

Hqtr Institution In-market Branch % ofFinancial Institution State Type Deposits Deposits Count Institution

EXCLUDED: % IN MARKET1 Bank of America Corp. NC Bank $590,620 $515.3 12 0.1%2 Wells Fargo & Company CA Bank 308,987 473.5 12 0.2%3 Plains Bancorp, Inc. TX Bank 446 258.8 9 58.0%4 CitiGroup, Inc. NY Bank 224,597 225.2 9 0.1%5 JPMorgan Chase & Co. NY Bank 462,295 203.6 3 0.0%6 Olney Bancshares of TX TX Bank 764 202.3 8 26.5%7 Waupaca Bancorporation WI Bank 385 152.3 3 39.5%8 American State Fin Corp. TX Bank 1,690 149.3 3 8.8%9 World Savings Bank FSB CA Thrift 61,321 109.2 1 0.2%

10 First Financial Bankshares TX Bank 2,372 88.4 1 3.7%11 South Plains Financial TX Bank 1,001 64.5 5 6.4%12 McLaughlin Bancshares TX Bank 105 53.3 4 50.6%13 Baylor Bancshres, Inc. TX Bank 170 44.2 4 25.9%14 Eggemeyer Advisory Corp. CA Bank 4,528 41.1 1 0.9%15 City Bancorp, Inc. TX Bank 65 37.9 2 58.1%16 Triple J Financial TX Bank 76 29.1 2 38.4%17 Lubco Bancshares TX Bank 147 26.2 1 17.9%18 AIM Bancshares, Inc. TX Bank 65 22.2 2 34.2%19 First Bancshares of TX TX Bank 145 14.7 2 10.2%20 Peoples Bancorp TX Bank 127 7.0 1 5.5%21 Woodforest Financial Group TX Bank 1,878 6.8 2 0.4%22 First Community Bancshares TX Bank 781 4.1 7 0.5%

TOTAL DEPOSITS $2,729.0 94 EXCLUDED: SIZE

1 Amarillo National Bancorp TX Bank $1,622 $1,622.2 15 100.0%2 Firstperryton Bancorp TX Bank 532 532.5 8 100.0%3 Happy Bancshares, Inc. TX Bank 371 370.5 12 100.0%4 Herring Bancorp, Inc. TX Bank 295 200.8 5 68.0%5 HaleCo Bancshares TX Bank 274 218.8 6 79.8%


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EXHIBIT THREETEXAS PANHANDLEFINANCIAL INSTITUTION DEPOSITSAND MARKET SHARE BY COUNTY (millions) Total % of

Hqtr Institution In-market Branch % of CountyFinancial Institution County State Type Deposits Deposits Count Inst Market

1 AIM Bancshares, Inc. Lamb TX Bank $65.0 $22.2 2 34.2% 9.0%

2 Amarillo National Bancorp Potter TX Bank $1,622 $1,331.0 9 82.1% 52.3%Amarillo National Bancorp Randall TX Bank 206.8 5 12.7% 21.9%Amarillo National Bancorp Hutchinson TX Bank 84.3 1 5.2% 50.8%

TOTAL INSTITUTION $1,622.2 15 100.0%

3 American State Fin Corp. Hale TX Bank $1,690 $114.7 1 6.8% 28.5%American State Fin Corp. Lamb TX Bank 21.8 1 1.3% 8.8%American State Fin Corp. Floyd TX Bank 12.8 1 0.8% 12.1%

TOTAL INSTITUTION $149.3 3 8.8%

4 Bank of America Corp. Potter NC Bank $590,620 $333.9 4 0.1% 13.1%Bank of America Corp. Randall NC Bank 84.2 3 0.0% 8.9%Bank of America Corp. Gray NC Bank 39.5 2 0.0% 12.1%Bank of America Corp. Dallam NC Bank 30.9 1 0.0% 18.3%Bank of America Corp. Moore NC Bank 26.8 2 0.0% 16.7%


5 Baylor Bancshres, Inc. Hall TX Bank $170.4 $20.3 2 11.9% 31.5%Baylor Bancshres, Inc. Carson TX Bank 12.8 1 7.5% 16.5%Baylor Bancshres, Inc. Motley TX Bank 11.1 1 6.5% 100.0%


6 Childress Bancshares, Inc. Childress TX Bank $68.6 $62.1 1 90.6% 52.9%Childress Bancshares, Inc. Cottle TX Bank 6.4 1 9.4% 13.0%


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7 CitiGroup, Inc. Randall NY Bank $224,597 $93.3 2 0.0% 9.9%CitiGroup, Inc. Potter NY Bank 68.0 4 0.0% 2.7%CitiGroup, Inc. Gray NY Bank 56.1 2 0.0% 17.2%CitiGroup, Inc. Deaf Smith NY Bank 7.9 1 0.0% 4.0%


8 City Bancorp, Inc. Collingsworth TX Bank $65.3 $23.1 1 35.3% 36.1%City Bancorp, Inc. Donley TX Bank 14.8 1 22.8% 18.4%


9 Crowell Bancshares, Inc. Foard TX Bank $20.8 $20.8 1 100.0% 100.0%

10 Dalhart FS&LA Dallam TX Thrift $66.3 $47.0 1 70.8% 27.9%Dalhart FS&LA Moore TX Thrift 19.3 1 29.2% 12.0%


11 DG Partnership, Ltd Bailey TX Bank $66.4 $39.9 1 60.1% 44.9%DG Partnership, Ltd Parmer TX Bank 15.5 1 23.4% 9.5%DG Partnership, Ltd Castro TX Bank 11.0 1 16.6% 13.3%


12 Donley County Bancshs Donley TX Bank $24.2 $24.2 1 100.0% 30.1%13 Eggemeyer Advisory Corp. Hale CA Bank $4,528 $41.1 1 0.9% 10.2%

14 Falcon Bancorporation Hall TX Bank $40.4 $38.0 1 94.1% 59.0%Falcon Bancorporation Potter TX Bank 2.4 1 5.9% 0.1%


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15 First Amherst Bancshares Lamb TX Bank $12.0 $12.0 1 100.0% 4.9%16 First Bancshares of TX Potter TX Bank $145.0 $14.7 2 10.2% 0.6%

17 First Canadian Bancorp Hemphill TX Bank $66.6 $55.9 1 83.8% 47.0%First Canadian Bancorp Lipscomb TX Bank 10.8 1 16.2% 14.0%


18 First Community Bancshares Hale TX Bank $781.4 $0.9 1 0.1% 0.2%First Community Bancshares Moore TX Bank 0.7 1 0.1% 0.4%First Community Bancshares Gray TX Bank 0.7 1 0.1% 0.2%First Community Bancshares Potter TX Bank 0.7 1 0.1% 0.0%First Community Bancshares Deaf Smith TX Bank 0.6 1 0.1% 0.3%First Community Bancshares Randall TX Bank 0.5 2 0.1% 0.1%


19 First Dalhart Bancshares Dallam TX Bank $43.0 $43.0 1 100.0% 25.5%20 First Financial Bankshares Deaf Smith TX Bank $2,372 $88.4 1 3.7% 44.7%21 First FS&LA, Littlefield TX Lamb TX Thrift $35.7 $35.7 2 100.0% 14.5%22 First Paducah Bancshs, TX Cottle TX Bank $43.2 $43.2 1 100.0% 87.0%

23 FirstPerryton Bancorp Potter TX Bank $532.5 $217.8 3 40.9% 8.6%FirstPerryton Bancorp Gray TX Bank 116.9 1 22.0% 35.8%FirstPerryton Bancorp Ochiltree TX Bank 115.9 1 21.8% 43.3%FirstPerryton Bancorp Deaf Smith TX Bank 43.6 1 8.2% 22.0%FirstPerryton Bancorp Lipscomb TX Bank 31.2 1 5.9% 40.6%FirstPerryton Bancorp Randall TX Bank 7.1 1 1.3% 0.8%


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24 First State Bank Hale TX Bank $20.8 $20.8 1 100.0% 5.2%25 First State Bankshares Hansford TX Bank $64.5 $64.5 1 100.0% 36.9%26 First State of Mobeetie Wheeler TX Bank $43.1 $43.1 2 100.0% 31.9%27 Floyd County Bancshares Floyd TX Bank $64.9 $64.9 1 100.0% 61.2%28 GrayCo Bancshares Gray TX Bank $10.3 $10.3 1 100.0% 3.2%

29 Groom Bancshares Carson TX Bank $29.7 $23.6 1 79.7% 30.6%Groom Bancshares Potter TX Bank 6.0 1 20.3% 0.2%


30 GSB Bancshares Hansford TX Bank $27.3 $27.3 1 100.0% 15.6%

31 HaleCo Bancshares Hale TX Bank $274.1 $110.0 2 40.1% 27.3%HaleCo Bancshares Deaf Smith TX Bank 57.5 1 21.0% 29.1%HaleCo Bancshares Swisher TX Bank 27.2 1 9.9% 23.0%HaleCo Bancshares Castro TX Bank 13.0 1 4.8% 15.8%HaleCo Bancshares Parmer TX Bank 11.1 1 4.1% 6.8%


32 Happy Bancshares, Inc. Randall TX Bank $370.5 $150.7 3 40.7% 15.9%Happy Bancshares, Inc. Moore TX Bank 74.4 2 20.1% 46.2%Happy Bancshares, Inc. Potter TX Bank 63.0 3 17.0% 2.5%Happy Bancshares, Inc. Carson TX Bank 35.6 1 9.6% 46.0%Happy Bancshares, Inc. Sherman TX Bank 21.3 1 5.7% 30.8%Happy Bancshares, Inc. Swisher TX Bank 17.2 1 4.6% 14.5%Happy Bancshares, Inc. Dallam TX Bank 8.4 1 2.3% 5.0%


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33 Herring Bancorp, Inc. Potter TX Bank $295.4 $124.9 3 42.3% 4.9%Herring Bancorp, Inc. Donley TX Bank 41.5 1 14.1% 51.5%Herring Bancorp, Inc. Randall TX Bank 34.4 1 11.6% 3.6%


34 High Plains Bancshares Bailey TX Bank $66.0 $48.9 1 74.1% 55.1%High Plains Bancshares Parmer TX Bank 17.1 1 25.9% 10.4%


35 ISB Holdings, Inc. Ochiltree TX SB $84.7 $80.7 1 95.2% 30.2%ISB Holdings, Inc. Hansford TX SB 4.1 1 4.8% 2.3%


36 JPMorgan Chase & Co. Potter NY Bank $462,295 $203.6 3 0.0% 8.0%37 Kress National Bancshares Swisher TX Bank $24.4 $24.4 1 100.0% 20.6%38 Lubco Bancshares Wheeler TX Bank $146.6 $26.2 1 17.9% 19.4%39 McLaughlin Bancshares Hale TX Bank $105.4 $53.3 4 50.6% 13.2%

40 Miami Bancshares, Inc. Gray TX Bank $24.4 $13.6 1 55.8% 4.2%Miami Bancshares, Inc. Roberts TX Bank 10.8 1 44.2% 100.0%


41 Northern Bancshares, Inc. Hardeman TX Bank $31.4 $31.4 2 100.0% 53.2%

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42 Olney Bancshares of TX Parmer TX Bank $763.5 $52.9 1 6.9% 32.2%Olney Bancshares of TX Hemphill TX Bank 50.8 1 6.7% 42.8%Olney Bancshares of TX Lipscomb TX Bank 34.9 1 4.6% 45.4%Olney Bancshares of TX Hutchinson TX Bank 30.4 2 4.0% 18.3%Olney Bancshares of TX Childress TX Bank 16.9 1 2.2% 14.3%Olney Bancshares of TX Oldham TX Bank 11.0 1 1.4% 100.0%Olney Bancshares of TX Carson TX Bank 5.3 1 0.7% 6.9%


43 Peoples Bancorp Castro TX Bank $127.5 $7.0 1 5.5% 8.5%44 Perryton Bancshares Ochiltree TX Bank $70.8 $70.8 1 100.0% 26.5%

45 Plains Bancorp, Inc. Randall TX Bank $446.1 $77.8 3 17.4% 8.2%Plains Bancorp, Inc. Lamb TX Bank 76.7 3 17.2% 31.2%Plains Bancorp, Inc. Potter TX Bank 52.8 1 11.8% 2.1%Plains Bancorp, Inc. Castro TX Bank 51.5 2 11.6% 62.4%


46 Quannah Financial Corp. Hardeman TX Bank $27.6 $27.6 1 100.0% 46.8%47 Quitaque National Corp. Briscoe TX Bank $32.3 $32.3 1 100.0% 68.7%48 Security State Bank Parmer TX Bank $67.9 $67.9 1 100.0% 41.3%

49 South Plains Financial Floyd TX Bank $1,001 $28.4 2 2.8% 26.8%South Plains Financial Lamb TX Bank 21.4 2 2.1% 8.7%South Plains Financial Briscoe TX Bank 14.7 1 1.5% 31.3%


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50 Spearman Bancshares Hansford TX Bank $83.1 $78.9 1 94.9% 45.1%Spearman Bancshares Moore TX Bank 4.2 1 5.1% 2.6%


51 Stratford Bancshares, Inc. Sherman TX Bank $122.4 $47.8 1 39.1% 69.2%Stratford Bancshares, Inc. Dallam TX Bank 39.1 1 32.0% 23.2%Stratford Bancshares, Inc. Moore TX Bank 35.5 1 29.0% 22.0%


52 Triple J Financial Armstrong TX Bank $76.0 $20.5 1 27.0% 100.0%Triple J Financial Swisher TX Bank 8.6 1 11.3% 7.3%


53 Waupaca Bancorporation Gray WI Bank $385.5 $89.4 1 23.2% 27.4%Waupaca Bancorporation Wheeler WI Bank 34.4 1 8.9% 25.5%Waupaca Bancorporation Childress WI Bank 28.5 1 7.4% 24.2%


54 Wells Fargo & Company Randall CA Bank $308,987 $176.4 4 0.1% 18.7%Wells Fargo & Company Potter CA Bank 126.7 2 0.0% 5.0%Wells Fargo & Company Hale CA Bank 61.8 2 0.0% 15.3%Wells Fargo & Company Hutchinson CA Bank 51.3 2 0.0% 30.9%Wells Fargo & Company Swisher CA Bank 40.9 1 0.0% 34.6%Wells Fargo & Company Hartley CA Bank 16.4 1 0.0% 100.0%


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55 Woodforest Financial Group Randall TX Bank $1,878.1 $4.9 1 0.3% 0.5%Woodforest Financial Group Potter TX Bank 1.9 1 0.1% 0.1%


56 World Savings Bank FSB Randall CA Thrift $61,321 $109.2 1 0.2% 11.6%

57 WSB Bancshares, Inc. Collingsworth TX Bank $100.5 $40.8 1 40.6% 63.9%WSB Bancshares, Inc. Wheeler TX Bank 31.5 1 31.3% 23.3%WSB Bancshares, Inc. Hemphill TX Bank 12.1 1 12.0% 10.1%WSB Bancshares, Inc. Childress TX Bank 10.0 1 10.0% 8.5%WSB Bancshares, Inc. Hall TX Bank 6.1 1 6.1% 9.5%


58 XIT Bancshares, Inc. Lamb TX Bank $60.2 $56.3 3 93.4% 22.9%

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EXHIBIT FOURTEXAS PANHANDLEREPORTED DEPOSITS BY COUNTY (millions)

Total % ofHqtr Institution In-market Branch % of County

County Financial Institution State Type Deposits Deposits Count Inst Market

1 ArmstrongTriple J Financial TX Bank 76.0 $20.5 1 27.0% 100.0%

2 BaileyHigh Plains Bancshares TX Bank 66.0 $48.9 1 74.1% 55.1%DG Partnership, Ltd TX Bank 66.4 39.9 1 60.1% 44.9%

COUNTY TOTALS $88.8 2 100.0%3 Briscoe

Quitaque National Corp. TX Bank 32.3 $32.3 1 100.0% 68.7%South Plains Financial TX Bank 1,001.3 14.7 1 1.5% 31.3%

COUNTY TOTALS $47.1 2 100.0%4 Carson

Happy Bancshares, Inc. TX Bank 370.5 $35.6 1 9.6% 46.0%Groom Bancshares TX Bank 29.7 23.6 1 79.7% 30.6%Baylor Bancshres, Inc. TX Bank 170.4 12.8 1 7.5% 16.5%Olney Bancshares of TX TX Bank 763.5 5.3 1 0.7% 6.9%

COUNTY TOTALS $77.3 4 100.0%5 Castro

Plains Bancorp, Inc. TX Bank 446.1 $51.5 2 11.6% 62.4%HaleCo Bancshares TX Bank 274.1 13.0 1 4.8% 15.8%DG Partnership, Ltd TX Bank 66.4 11.0 1 16.6% 13.3%Peoples Bancorp TX Bank 127.5 7.0 1 5.5% 8.5%

COUNTY TOTALS $82.6 5 100.0%6 Childress

Childress Bancshares, Inc. TX Bank 68.6 $62.1 1 90.6% 52.9%Waupaca Bancorporation WI Bank 385.5 28.5 1 7.4% 24.2%Olney Bancshares of TX TX Bank 763.5 16.9 1 2.2% 14.3%WSB Bancshares, Inc. TX Bank 100.5 10.0 1 10.0% 8.5%

COUNTY TOTALS $117.5 4 100.0%

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7 CollingsworthWSB Bancshares, Inc. TX Bank 100.5 $40.8 1 40.6% 63.9%City Bancorp, Inc. TX Bank 65.3 23.1 1 35.3% 36.1%

COUNTY TOTALS $63.9 2 100.0%8 Cottle

First Paducah Bancshs, TX TX Bank 43.2 43.2 1 100.0% 87.0%Childress Bancshares, Inc. TX Bank 68.6 6.4 1 9.4% 13.0%

COUNTY TOTALS $49.6 2 100.0%9 Dallam

Dalhart FS&LA TX Thrift 66.3 $47.0 1 70.8% 27.9%First Dalhart Bancshares TX Bank 43.0 43.0 1 100.0% 25.5%Stratford Bancshares, Inc. TX Bank 122.4 39.1 1 32.0% 23.2%Bank of America Corp. NC Bank 590,619.7 30.9 1 0.0% 18.3%Happy Bancshares, Inc. TX Bank 370.5 8.4 1 2.3% 5.0%

COUNTY TOTALS $168.4 5 100.0%10 Deaf Smith

First Financial Bankshares TX Bank 2,372.4 $88.4 1 3.7% 44.7%HaleCo Bancshares TX Bank 274.1 57.5 1 21.0% 29.1%Firstperryton Bancorp TX Bank 532.5 43.6 1 8.2% 22.0%CitiGroup, Inc. NY Bank 224,597.3 7.9 1 0.0% 4.0%First Community Bancshares TX Bank 781.4 0.6 1 0.1% 0.3%

COUNTY TOTALS $197.9 5 100.0%11 Donley

Herring Bancorp, Inc. TX Bank 295.4 $41.5 1 14.1% 51.5%Donley County Bancshs TX Bank 24.2 24.2 1 100.0% 30.1%City Bancorp, Inc. TX Bank 65.3 14.8 1 22.8% 18.4%


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12 FloydFloyd County Bancshares TX Bank 64.9 $64.9 1 100.0% 61.2%South Plains Financial TX Bank 1,001.3 28.4 2 2.8% 26.8%American State Fin Corp. TX Bank 1,690.2 12.8 1 0.8% 12.1%

COUNTY TOTALS $106.0 4 100.0%13 Foard

Crowell Bancshares, Inc. TX Bank 20.8 $20.8 1 100.0% 100.0%

14 GrayFirstperryton Bancorp TX Bank 532.5 $116.9 1 22.0% 35.8%Waupaca Bancorporation WI Bank 385.5 89.4 1 23.2% 27.4%CitiGroup, Inc. NY Bank 224,597.3 56.1 2 0.0% 17.2%Bank of America Corp. NC Bank 590,619.7 39.5 2 0.0% 12.1%Miami Bancshares, Inc. TX Bank 24.4 13.6 1 55.8% 4.2%GrayCo Bancshares TX Bank 10.3 10.3 1 100.0% 3.2%First Community Bancshares TX Bank 781.4 0.7 1 0.1% 0.2%

COUNTY TOTALS $326.5 9 100.0%15 Hale

American State Fin Corp. TX Bank 1,690.2 $114.7 1 6.8% 28.5%HaleCo Bancshares TX Bank 274.1 110.0 2 40.1% 27.3%Wells Fargo & Company CA Bank 308,987.1 61.8 2 0.0% 15.3%McLaughlin Bancshares TX Bank 105.4 53.3 4 50.6% 13.2%Eggemeyer Advisory Corp. CA Bank 4,527.8 41.1 1 0.9% 10.2%First State Bank TX Bank 20.8 20.8 1 100.0% 5.2%First Community Bancshares TX Bank 781.4 0.9 1 0.1% 0.2%


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16 HallFalcon Bancorporation TX Bank 40.4 $38.0 1 94.1% 59.0%Baylor Bancshres, Inc. TX Bank 170.4 20.3 2 11.9% 31.5%WSB Bancshares, Inc. TX Bank 100.5 6.1 1 6.1% 9.5%

COUNTY TOTALS $64.4 4 100.0%17 Hansford

Spearman Bancshares TX Bank 83.1 $78.9 1 94.9% 45.1%First State Bankshares TX Bank 64.5 64.5 1 100.0% 36.9%GSB Bancshares TX Bank 27.3 27.3 1 100.0% 15.6%ISB Holdings, Inc. TX SB 84.7 4.1 1 4.8% 2.3%

COUNTY TOTALS $174.8 4 100.0%18 Hardeman

Northern Bancshares, Inc. TX Bank 31.4 $31.4 2 100.0% 53.2%Quannah Financial Corp. TX Bank 27.6 27.6 1 100.0% 46.8%


19 HartleyWells Fargo & Company CA Bank 308,987.1 $16.4 1 0.0% 100.0%

20 HemphillFirst Canadian Bancorp TX Bank 66.6 $55.9 1 83.8% 47.0%Olney Bancshares of TX TX Bank 763.5 50.8 1 6.7% 42.8%WSB Bancshares, Inc. TX Bank 100.5 12.1 1 12.0% 10.1%


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21 HutchinsonAmarillo National Bancorp TX Bank 1,622.2 $84.3 1 5.2% 50.8%Wells Fargo & Company CA Bank 308,987.1 51.3 2 0.0% 30.9%Olney Bancshares of TX TX Bank 763.5 30.4 2 4.0% 18.3%

COUNTY TOTALS $166.1 5 100.0%22 Lamb

Plains Bancorp, Inc. TX Bank 446.1 $76.7 3 17.2% 31.2%XIT Bancshares, Inc. TX Bank 60.2 56.3 3 93.4% 22.9%First FS&LA Littlefield TX TX Thrift 35.7 35.7 2 100.0% 14.5%AIM Bancshares, Inc. TX Bank 65.0 22.2 2 34.2% 9.0%American State Fin Corp. TX Bank 1,690.2 21.8 1 1.3% 8.8%South Plains Financial TX Bank 1,001.3 21.4 2 2.1% 8.7%First Amherst Bancshares TX Bank 12.0 12.0 1 100.0% 4.9%

COUNTY TOTALS $246.0 14 100.0%23 Lipscomb

Olney Bancshares of TX TX Bank 763.5 $34.9 1 4.6% 45.4%FirstPerryton Bancorp TX Bank 532.5 31.2 1 5.9% 40.6%First Canadian Bancorp TX Bank 66.6 10.8 1 16.2% 14.0%

COUNTY TOTALS $76.9 3 100.0%24 Moore

Happy Bancshares, Inc. TX Bank 370.5 $74.4 2 20.1% 46.2%Stratford Bancshares, Inc. TX Bank 122.4 35.5 1 29.0% 22.0%Bank of America Corp. NC Bank 590,619.7 26.8 2 0.0% 16.7%Dalhart FS&LA TX Thrift 66.3 19.3 1 29.2% 12.0%Spearman Bancshares TX Bank 83.1 4.2 1 5.1% 2.6%First Community Bancshares TX Bank 781.4 0.7 1 0.1% 0.4%


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25 MotleyBaylor Bancshres, Inc. TX Bank 170.4 $11.1 1 6.5% 100.0%

26 OchiltreeFirstPerryton Bancorp TX Bank 532.5 $115.9 1 21.8% 43.3%ISB Holdings, Inc. TX SB 84.7 80.7 1 95.2% 30.2%Perryton Bancshares TX Bank 70.8 70.8 1 100.0% 26.5%

COUNTY TOTALS $267.4 3 100.0%27 Oldham

Olney Bancshares of TX TX Bank 763.5 $11.0 1 1.4% 100.0%

28 ParmerSecurity State Bank TX Bank 67.9 $67.9 1 100.0% 41.3%Olney Bancshares of TX TX Bank 763.5 52.9 1 6.9% 32.2%High Plains Bancshares TX Bank 66.0 17.1 1 25.9% 10.4%DG Partnership, Ltd TX Bank 66.4 15.5 1 23.4% 9.5%HaleCo Bancshares TX Bank 274.1 11.1 1 4.1% 6.8%


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29 PotterAmarillo National Bancorp TX Bank 1,622.2 $1,331.0 9 82.1% 52.3%Bank of America Corp. NC Bank 590,619.7 333.9 4 0.1% 13.1%Firstperryton Bancorp TX Bank 532.5 217.8 3 40.9% 8.6%JPMorgan Chase & Co. NY Bank 462,295.3 203.6 3 0.0% 8.0%Wells Fargo & Company CA Bank 308,987.1 126.7 2 0.0% 5.0%Herring Bancorp, Inc. TX Bank 295.4 124.9 3 42.3% 4.9%CitiGroup, Inc. NY Bank 224,597.3 68.0 4 0.0% 2.7%Happy Bancshares, Inc. TX Bank 370.5 63.0 3 17.0% 2.5%Plains Bancorp, Inc. TX Bank 446.1 52.8 1 11.8% 2.1%First Bancshares of TX TX Bank 145.0 14.7 2 10.2% 0.6%Groom Bancshares TX Bank 29.7 6.0 1 20.3% 0.2%Falcon Bancorporation TX Bank 40.4 2.4 1 5.9% 0.1%Woodforest Financial Group TX Bank 1,878.1 1.9 1 0.1% 0.1%First Community Bancshares TX Bank 781.4 0.7 1 0.1% 0.0%

COUNTY TOTALS $2,547.3 38 100.0%30 Randall

Amarillo National Bancorp TX Bank 1,622.2 $206.8 5 12.7% 21.9%Wells Fargo & Company CA Bank 308,987.1 176.4 4 0.1% 18.7%Happy Bancshares, Inc. TX Bank 370.5 150.7 3 40.7% 15.9%World Savings Bank FSB CA Thrift 61,321.4 109.2 1 0.2% 11.6%CitiGroup, Inc. NY Bank 224,597.3 93.3 2 0.0% 9.9%Bank of America Corp. NC Bank 590,619.7 84.2 3 0.0% 8.9%Plains Bancorp, Inc. TX Bank 446.1 77.8 3 17.4% 8.2%Herring Bancorp, Inc. TX Bank 295.4 34.4 1 11.6% 3.6%Firstperryton Bancorp TX Bank 532.5 7.1 1 1.3% 0.8%Woodforest Financial Group TX Bank 1,878.1 4.9 1 0.3% 0.5%First Community Bancshares TX Bank 781.4 0.5 2 0.1% 0.1%


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31 RobertsMiami Bancshares, Inc. TX Bank 24.4 $10.8 1 44.2% 100.0%

32 ShermanStratford Bancshares, Inc. TX Bank 122.4 $47.8 1 39.1% 69.2%Happy Bancshares, Inc. TX Bank 370.5 21.3 1 5.7% 30.8%

COUNTY TOTALS $69.1 2 100.0%33 Swisher

Wells Fargo & Company CA Bank 308,987.1 $40.9 1 0.0% 34.6%HaleCo Bancshares TX Bank 274.1 27.2 1 9.9% 23.0%Kress National Bancshares TX Bank 24.4 24.4 1 100.0% 20.6%Happy Bancshares, Inc. TX Bank 370.5 17.2 1 4.6% 14.5%Triple J Financial TX Bank 76.0 8.6 1 11.3% 7.3%

COUNTY TOTALS $118.2 5 100.0%34 Wheeler

First State of Mobeetie TX Bank 43.1 $43.1 2 100.0% 31.9%Waupaca Bancorporation WI Bank 385.5 34.4 1 8.9% 25.5%WSB Bancshares, Inc. TX Bank 100.5 31.5 1 31.3% 23.3%Lubco Bancshares TX Bank 146.6 26.2 1 17.9% 19.4%


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EXHIBIT FIVETEXAS PANHANDLEFINANCIAL INSTITUTIONS - RELATED BANKSJUNE 30, 2006 (millions)

Headqtr Bank BranchFinancial Institution State Subsidiary Deposits Count

1 AIM Bancshares, Inc. TX AimBank $22.2 2 2 Amarillo National Bancorp TX Amarillo National Bank 1,622.150 15 3 American State Fin Corp. TX American State Bank 149.3 3 4 Bank of America Corp. NC Bank of America 515.3 12 5 Baylor Bancshres, Inc. TX Memphis State Bank 44.2 4

First NB of Seymour6 Childress Bancshares, Inc. TX First B&T of Childress 68.6 2 7 CitiGroup, Inc. NY CitiBank Texas 225.2 9 8 City Bancorp, Inc. TX Community Bank 37.9 2 9 Crowell Bancshares, Inc. TX Crowell State Bank 20.8 1

10 Dalhart FS&LA TX Dalhart FS&LA 66.3 2 11 DG Partnership, Ltd TX First Bank of Muleshoe 66.4 3 12 Donley County Bancshs TX Donley County State Bank 24.2 1 13 Eggemeyer Advisory Corp. CA State National Bank 41.1 1 14 Falcon Bancorporation TX First B&T of Memphis 40.4 2 15 First Amherst Bancshares TX First NB of Amherst 11.974 1 16 First Bancshares of TX TX First NB of Midland 14.7 2 17 First Canadian Bancorp TX First NB of Canadian 66.6 2 18 First Community Bancshares TX First National Bank of TX 4.135 7 19 First Dalhart Bancshares TX First NB in Dalhart 43.0 1 20 First Financial Bankshares TX Hereford State Bank 88.4 1 21 First FS&LA, Littlefield, TX TX First FS&LA Littlefield TX 35.7 2 22 First Paducah Bancshs, TX TX First NB of Paducah 43.2 1 23 First State Bank TX First State Bank 20.8 1 24 First State Bankshares TX First State Bank 64.5 1 25 First State of Mobeetie TX First State of Mobeetie 43.1 2 26 FirstPerryton Bancorp TX First Bank Southwest 532.5 8 27 Floyd County Bancshares TX First NB of Floydada 64.9 1 28 GrayCo Bancshares TX Bank of Commerce 10.341 1 29 Groom Bancshares TX State NB of Groom 29.7 2 30 GSB Bancshares TX Gruver State Bank 27.3 1 31 HaleCo Bancshares TX First NB of Hereford 218.8 6

HCSB32 Happy Bancshares, Inc. TX Happy State Bank 370.5 12 33 Herring Bancorp, Inc. TX Herring Bank 200.8 5 34 High Plains Bancshares TX Muleshoe State Bank 66.0 2 35 ISB Holdings, Inc. TX Interstate Bank, SSB 84.7 2 36 JPMorgan Chase & Co. NY JPMorgan Chase Bank 203.6 3 37 Kress National Bancshares TX Kress National Bank 24.4 1 38 Lubco Bancshares TX Citizens Bank 26.2 1 39 McLaughlin Bancshares TX Security Bank 53.3 4 40 Miami Bancshares, Inc. TX First SB of Miami 24.4 2 41 Northern Bancshares, Inc. TX First NB of Chillicothe 31.4 2

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EXHIBIT FIVETEXAS PANHANDLEFINANCIAL INSTITUTIONS - RELATED BANKSJUNE 30, 2006 (millions)

Headqtr Bank BranchFinancial Institution State Subsidiary Deposits Count

42 Olney Bancshares of TX TX First NB of Borger 202.3 8 Fist SB of CanadianFriona State BankFarmers NB, Seymour

43 Peoples Bancorp TX Peoples Bank 7.0 1 44 Perryton Bancshares TX Perryton National Bank 70.8 1 45 Plains Bancorp, Inc. TX First United Bank 258.8 9 46 Quannah Financial Corp. TX First NB in Quanah 27.6 1 47 Quitaque National Corp. TX First NB of Quitaque 32.3 1 48 Security State Bank TX Security State Bank 67.9 1 49 South Plains Financial TX City Bank 64.5 5 50 Spearman Bancshares TX First National Bank 83.1 2 51 Stratford Bancshares, Inc. TX First State Bank 122.4 3 52 Triple J Financial TX Citizens Bank 29.1 2 53 Waupaca Bancorporation WI First National Bank 152.3 3 54 Wells Fargo & Company CA Wells Fargo Bank 473.5 12 55 Woodforest Financial Group TX Woodforest National Bank 6.793 2 56 World Savings Bank FSB CA World Savings Bank FSB 109.2 1 57 WSB Bancshares, Inc. TX Wellington State Bank 100.5 5 58 XIT Bancshares, Inc. TX Security State Bank 56.3 3


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SUPPLEMENTAL EXHIBITACQUISITION SIZE LIMITS (millions)

Target Equity7.0% 8.0%

CLIENT'S FINANCIAL PARAMETERSCURRENT FINANCIAL BALANCES

Tangible assets $300.0 $300.0Tangible common equity 36.0 36.0 Tangible common equity ratio 12.0% 12.0%

TARGET EQUITY LEVELSTangible assets $300.0 $300.0Target tangible common equity ratio 7.0% 8.0% REQUIRED FOR EXISTING ASSETS $21.0 $24.0

USE OF EXCESS EQUITYTARGET EQUITY LEVELS

Tangible common equity $36.0 $36.0Target tangible common equity level 21.0 24.0 EXCESS FOR ACQUISITION $15.0 $12.0

LIMITS ON ASSET ACQUIREDExcess for acquisition $15.0 $12.0Adjusted book multiple 1.75 2.00 CORE EQUITY ACQUIRED $8.6 $6.0Target tangible common equity ratio 7.0% 8.0% TOTAL ASSETS ACQUIRED $122.4 $75.0

AGGREGATED TANGIBLE ASSETS AND EQUITYCONSOLIDATED ASSETS

Existing tangible assets $300.0 $300.0Acquired assets 122.4 75.0 CONSOLIDATED ASSETS $422.4 $375.0

GOODWILL CREATEDPrice paid $15.0 $12.0Core equity 8.6 6.0 GOODWILL CREATED $6.4 $6.0

TANGIBLE COMMON EQUITY WITH ACQUISITIONTangible common equity $36.0 $36.0Goodwill created 6.4 6.0 NET TANGIBLE EQUITY $29.6 $30.0Consolidated assets 422.4 375.0 CALCULATED EQUITY RATIO 7.00% 8.00%

Documents

TEXAS PANHANDLE POTENTIAL ACQUISITIONSinformdecisions.net/pdf/PanHanTargMkt.pdf · Financial Institution State Type Deposits Deposits Count Institution MERGER CANDIDATES Stratford